The assessee, M/s. Jainam Investments filed its return of income declaring total income to the tune of Rs. Nil for the Assessment Year 2011-12. The return was processed under section 143(1) of the Income Tax Act, 1961.
Thereafter, the case of the assessee was reopened. The reasons for reopening of the assessment was given to the assessee. The assessee received the accommodation entry in form of bogus unsecured loans from Bhanwarlal Jain Group run entities during the previous year in consideration.
The assessee filed the objection vide letter dated 17.05.2018. The AO rejected the objections by virtue of order. The AO completed the assessment by making an addition of Rs.24.35 crores under section 68 of the Act treating the loans received by the appellant as bogus thereby assessing the total income of the appellant at Rs.9,24,88,940/-. Thereafter, the assessee was not satisfied and filed an appeal before CIT(A) who allowed the claim of the assessee.
The revenue raised the issue whether on the facts and circumstances of the case and in law, the CIT(A) was justified in deleting the addition of Rs.24.35 Crore made under section 68 of the Income Tax Act without appreciating the finding that Shri Bhanwarlal Jain is engaged in the business of accommodation entries and hence AO was correct in concluding that the assessee was a beneficiary of the accommodation loans.
The coram of Rajesh Kumar and Amarjit Singh said that there is no cogent and convincing evidence on record to hold this fact that the business loss in the impugned scrip is bogus. It is also not apparent on record that the appellants name was appearing in any of the SEBI investigations in the impugned script.
“No evidence on record to which it can be assumed that the appellant had connived with any entry operator for executing the share transaction. What adverse information was received from the wing of Calcutta/investigation wing Mumbai against the assessee is not apparent on record. The evidence adduced by the assessee was not rebutted by the AO,” the ITAT observed while deciding the issue in favour of the assessee.Subscribe Taxscan AdFree to view the Judgment